OCTOBER 19, 2010

Apple earned $20B, record revenue and Mac sales in Q4 of 2010

Apple again announced the highest quarterly revenue ever for any financial quarter in its history during the fourth fiscal quarter (Q4) of 2010. Earnings per share (EPS) of $4.64 for Q4 of 2010 exceeded the consensus estimate of Wall Street analysts by over 15%. Revenue was $20.3 billion with a net quarterly profit of over $4.3 billion, which represents fantastic increases over the Q4 of 2009 of nearly 67 percent and over 70 percent respectively. Gross margin was down a bit to 37 percent from nearly 42 percent last year.

Apple's cash on hand grew to over $51 billion in Q4 of 2010.

Mac sales were up 27 percent again to nearly 3.9 million (a new quarterly record), iPhone sales were up 91 percent to 14.1 million and iPod sales were down 11 percent to 9.1 million, all as compared with the fourth quarter of 2009. Apple's iPad sales reached nearly 4.2 million, up 28% from Q3 when Apple first began selling them. Apple also began selling the iPhone 4 last quarter (Q3) and in Q4 is still selling all that they can make--I know, I finally got mine with no sign of the grip of death that plagued earlier production. The Mac's growth rate of 27% exceeded the projected growth of the PC market as a whole by double, resulting in Apple's market share continuing to improve.

This quarter the portable unit Mac sales growth of 17 percent fell well below the desktop unit sales increase of 58 percent, reversing the recent Mac type sales performance where portables led. But portables still outsold desktops by over 2 to 1.

All of Apple's operating segments (Americas, Europe, Japan, Asia Pacific and retail stores) scored increased unit sales and revenue over the same quarter in 2009, averaging 27 percent in unit sales and 67 percent in revenue. Apple's retail stores also had increases in unit sales and revenue of 30 percent and 75 percent respectively. There are now 317 Apple retail stores globally.

Apple's forecast for the next quarter's revenue is another record of about $23 billion with an new record earnings per share of about $4.80. Apple's forecasts have been quite conservative in the past.

Steve Jobs joined the telephone call to analysts at 2p PT yesterday to celebrate the fact that Apple is now a $20B company. He explained how competing tablets coming out soon with only 7" screens will be a huge mistake because Apple has conducted a lot of research which showed the optimum size for what people like to do on a tablet is 10". This seems to put to bed the rumor that Apple is going to release a smaller 7" iPad but, with Steve Jobs, you never really know for sure! He also mentioned that Apple has sold over 250,000 new AppleTVs. Finally, he picked apart the Android phone for not being an intergated device like the iPhone. Interesting stuff that is posted here if you want to listen. [Bill Fox]

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